Cuomo preparing charges against BofA

The New York Attorney General's office is preparing charges against several high-ranking Bank of America executives over the bank's alleged failure to disclose details about its acquisition of Merrill Lynch, according to a person familiar with the investigation.

Attorney General Andrew Cuomo's office is likely to file civil charges against the executives over their role in failing to alert shareholders to mounting losses as well as accelerated bonus payments at Merrill, said the person, who requested anonymity because no charges have been filed yet.

Separately, a federal judge on Monday rejected a $33 million settlement BofA reached with the Securities and Exchange Commission over disclosures tied to bonus payments at Merrill.

U.S. District Judge Jed Rakoff called the proposed consent judgment "inadequate."

Mr. Rakoff wrote in an opinion that the $33 million settlement was a "trivial penalty for a false statement that materially infected a multi-billion-dollar merger."

Mr. Rakoff set a Feb. 1 trial date for the case. The SEC had filed civil charges against Bank of America, saying it misled shareholders about bonus payments given to Merrill Lynch employees.

Last month, Mr. Rakoff ordered the SEC to explain why it didn't pursue charges against specific executives at Bank of America over the accusations.

Charlotte, N.C.-based Bank of America agreed to acquire Merrill in a shotgun deal a year ago at the height of the credit crisis. It was later revealed that Merrill, with the knowledge of Bank of America executives, accelerated $3.6 billion in bonus payments before the deal was closed on Jan. 1.

Both Bank of America and the SEC did not provide immediate comment on the ruling.

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